How Packaging and Kitting Reduce Returns and Damages for Retailers

Packaging and Kitting Services group together related products and ship them as one consolidated package. It’s an efficient way to ship and store your products.

Kitting processes reduce error and streamline inventory control. They can also help you sell slow-moving or dead stock items by including them in kits that attract new customers.

Cost-effectiveness

For many retailers, returns and damages are just part of the cost of doing business. These costs add up over time: they strain customer service, eat into shipping, labor and inventory costs, and reduce overall profitability. Fortunately, well-designed packaging and kitting can help mitigate these losses. Smartly implemented, they can help optimize logistics operations, drive up product sales and amplify customer satisfaction.

Kitting is a logistics technique that groups together related items for assembly or shipment. It can be as simple as a pack of screws, nuts and bolts for a furniture manufacturer or as complex as a pre-assembled electronics kit. For ecommerce businesses, kits can be used to boost average order value (AOV), push slow-moving products or push new items by including them in a bundle that customers can’t resist.

Optimized packaging and kitting can reduce internal damage by providing better protection for fragile products and limiting the number of steps in order fulfillment. They can also improve inventory visibility and reduce picking errors through clear labeling, standardization of sizes, automation and automated verification tools. These improvements lead to reduced damage claims, which in turn can reduce outbound costs and operational disruptions.

In addition to improving efficiency and reducing claims, packaging and kitting can significantly reduce costs by streamlining warehouse operations. This can be achieved through standardized or stackable designs that improve storage and movement, and through organized kitting processes that optimize space. They can also accelerate order fulfillment by pre-packaging products into a ready-to-ship format, especially important during peak season.

A good kitting strategy involves a collaborative process between packaging and supply chain teams to ensure that the right materials are used for the right products at the best possible price. This can include sourcing reusable materials that extend the life of existing packaging, using automation to streamline operations, and establishing a thorough employee training program to help employees understand the importance of their role in the kitting process. This helps build greater team buy-in, and can further minimize costs through fewer errors and faster fulfillment times. It’s also a good idea to leverage software systems that track inventory in real-time to avoid stock shortages and other costly disruptions.

Durability

A reliable product packaging and kitting strategy ensures that your products arrive intact, on time, and ready to sell. This reduces returns and damages, enhances customer satisfaction, and builds stronger business partnerships.

Whether you are shipping to customers in DTC or B2B, relying on the right partners for your inventory kitting needs can help you optimize fulfillment for peak performance. Look for a partner with a proven track record handling diverse projects and the capacity to scale up as your business grows.

The first step in the kitting process is deciding what it will consist of. Your intention will often drive this decision. Depending on your goal, you may want to push slow-moving items by pairing them with best-sellers, or you might create a convenience kit that includes products customers typically buy together. It is also common to include free samples in kits to encourage customers to make larger purchases.

Once you have determined what your kit will comprise, the next step is assembling it. You can choose to do this yourself or outsource the process to a specialist company that will assemble the kit and label it with its own unique SKU. The company will also likely store the components of the kit in the warehouse near each other to facilitate easy assembly when orders come in.

Kitting can also reduce order errors by simplifying the process of locating individual parts. It is essential to provide comprehensive employee training, incorporating visual aids like clear labels, color coding, and barcoding on totes or trays, so that employees can identify the correct parts and assemble them quickly and accurately. In addition, utilizing quality control tools like inspection checkpoints and automated verification processes can also boost efficiency, accuracy, and safety.

Lastly, using a kitting solution to streamline order fulfillment can cut costs by optimizing transportation and logistics. For example, it is more cost-effective to ship five individual packages than one consolidated box. This can also help reduce your carbon footprint and waste by reducing emissions and minimizing transportation fees.

Convenience

Kitting involves grouping and packaging separate but related items together into a single unit that can be shipped as a whole. For example, a seller of auto parts could create a kit containing everything customers need to overhaul their brakes. In this way, a business can avoid the time-consuming and costly process of picking, packing, and shipping each item individually. Kitting also reduces the risk of damage during transport, which can otherwise cause expensive product returns and reworking costs.

Businesses can choose to assemble their kits in-house or outsource the task to a third party. In either case, this approach streamlines operations and minimizes labor costs. It also eliminates the need for workers to search through different locations in the warehouse to find the necessary materials to fulfill orders. Kitting can also help a company reduce the number of SKUs in its inventory, which makes it easier to organize and track stock.

Choosing the right kitting solution requires careful consideration. A reliable provider will offer a variety of materials and options to accommodate diverse requirements, including reusable systems, tough materials, and automated assembly stations. Opting for these features increases product durability and supports sustainability initiatives. It is also important to establish a robust quality control system with inspection checkpoints and barcoding that ensures accuracy.

In addition, a reliable kitting partner will provide a high level of consistency in production and supply, minimizing damage rates and operational delays. This translates into stronger relationships with suppliers and customers, as well as lower costs through efficient workflows and streamlined logistics processes.

Optimizing packaging and kitting strategies can greatly reduce damages, returns, and overall costs. This translates into higher value shipments, faster order fulfillment, and improved warehouse efficiency. In addition, reducing SKUs and leveraging standardized designs for packaging can improve inventory visibility and make it easier to forecast demand. Finally, implementing a consistent kitting process can also reduce warehousing and distribution fees by lowering the amount of space required for storage.

Sustainability

While sustainable shipping and fulfillment are key parts of a retailer’s sustainability strategy, returns are often overlooked. The good news is that many of the top reasons for customer returns are within the control of retailers, including mismatched items, problems with fit, incorrectly shipped products and damaged goods. Moreover, many of these issues can be addressed through efficient supply chains and logistics operations.

One of the best ways to reduce returns is through kitting, a packaging technique that groups complementary products into a single unit with a unique SKU. Kitting is similar to bundling, but the latter is a more general term used to describe any grouping of items (think IKEA furniture pieces). For example, subscription boxes may include all the ingredients needed to make specific recipes. In addition to reducing shipping and storage costs, kitting also allows companies to increase average order value, sell more products overall, and boost customer satisfaction.

In addition to lowering shipping costs, kits help companies streamline product assembly and on-site worker productivity. By consolidating miscellaneous items into a pre-organized kit, workers spend less time searching for components and can focus on the job at hand. This is especially helpful in industries that require field deployment, like defense and industrial automation, where maintenance contractors provide technicians with preassembled custom kits that allow them to get to work right away.

Another way that kitting can improve sustainability is by limiting inventory waste and shipping-related emissions. By shipping fewer individual orders, businesses can cut packaging waste, reduce transportation emissions and limit warehouse storage requirements. In addition, a company that combines multiple orders into a single shipment can reduce the number of inventory management issues that result in mistakes and delays.

A good fulfillment partner can offer valuable kitting and assembly services that reduce returns and damages, optimize supply chain operations, and ensure customers have the correct parts and information to complete their purchase. To find the best fit, look for a company that has experience handling diverse projects and understands your industry. They should be able to scale their operations according to your needs and have an understanding of the latest sustainable logistics trends.

Source: https://www.rednecksrevenge.org/how-packaging-and-kitting-reduce-returns-and-damages-for-retailers/